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The International Publishing Group is raising $10 million by issuing 15-year bonds with a coupon rate...

The International Publishing Group is raising $10 million by issuing 15-year bonds with a coupon rate of 10.11 percent. Coupon payments will be made annually. Investors buying the bonds today will earn a yield to maturity of 10.11 percent. At what price will the bonds sell in the marketplace? Explain. (Round intermediate calculations to 4 decimal places, e.g. 1.2514 and final answer to 2 decimal places, e.g. 15.25.)

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Answer #1

Face Value of Bond = 10.11%

Coupon rate = 10.11%

YTM = 10.11%

When the YTM and Caupon Rate are same, the value of the Bond will be equal to Face Value i.e. $1000

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